Recent Issues

Vol.17/2 (2011, December)
The Effect of Local Holdings on Audit Policy and Outcomes
Author Bok Baik
Keywords none
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This paper examines whether local block holdings are associated with audit policy and outcomes. For local investors are long-term investors and they tend to invest a larger portion of their total investment in local companies, I posit that local block holders will be dedicated investors and have strong incentives to monitor management. Consistently I find that companies with local block holders are less likely to have unclean/going-concern opinions, and more likely to have long-term relationships with auditors. In addition, although I find weak evidence that the existence of local block investors affects audit fees, I do not observe any significant difference of audit fees between firms with local block holdings and firms with nonlocal block holdings. Overall, this paper shows that information advantage of local investors can have real effects on audit process through monitoring activities.
Vol.17/2 (2011, December)
Cooperative Exchange with Substitutable Ties and Its Competitive Outcomes
Author Jonghoon Bae
Keywords Social Capital, Tie Substitution, Cooperation
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With a model of tie substitution, a construct that reflects each actor’s evaluation of his or her social relations or networks, this study proposes that each actor’s subjective evaluation of objective structural constraints may facilitate or delay the realization of structural constraints in general and the division of cooperative benefits in particular. It shows the following: first, ego with few (perceived) substitutable ties is likely to accept the unequal allocation of cooperative benefits; second, symmetry in tie-substitution at the global network suppresses (aggravates) competition for the division of cooperative outcomes when individual tie-substitution is low (high).
Vol.17/2 (2011, December)
Brand Equity Model and Marketing Stimuli
Author Hong-Youl Ha
Keywords marketing stimulus, brand equity process, satisfaction, loyalty
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The intangibility of services differentiates product brands from its characteristics. Building brand equity in the context of services, is therefore crucial to the conduct of a firm’ marketing strategies and plays an important role in increasing consumers’ perceptions. This study attempts to address relationships between brand equity and marketing stimuli. In particular, the study aims to draw theoretical and managerial implications from comparisons between bank services and discount malls. The empirical tests use a structural equation model (bank vs. discount mall) to support the research hypotheses. The findings show that marketing stimuli have a different influence on brand equity between the two different categories. Results from comparison between two different settings indicate that satisfaction plays a critical role as a mediator between antecedents of brand equity and outcomes. As a result, the model increases understanding of brand equity processes and extends existing knowledge of academic scholars in different service categories. This article discusses future research directions and managerial implications
Vol.17/2 (2011, December)
Corporate Governance and International Portfolio Investment in Equities
Author Jinsoo Lee and Seongwuk Moon
Keywords Corporate Governance, International Portfolio Investment in Equities
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Previous articles examined international portfolio investments either by a single investor or to a single destination. We examine the determinants of international equity investment patterns using multiple pairs of source and host countries. Specifically, we investigate how the corporate governance institutions in investing and recipient countries are associated to equity investment and divestiture using the 2006 and 2008 Coordinated Portfolio Investment Survey (CPIS) data. We find that source countries buy equities in host countries with strong governance more than in host countries with weak governance. We also find that investors from strong governance countries disproportionately sell more their equities in weak governance countries during the recent economic crisis. However, investors from weak governance countries do not demonstrate such divestiture pattern.
Vol.17/1 (2011, June)
Effects of High Performance Work Systems, Entrepreneurship and Organizational Culture on Organizational Performance
Author Jee Young Seong
Keywords High Performance Work Systems, Entrepreneurship, Organizational Culture, Organizational Performance
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Focusing on Korean small and medium-sized firms, this paper examines the relationships between high performance work systems (HPWSs), entrepreneurship and organizational culture and organizational performance. The findings reveal that HPWSs and entrepreneurship are significantly related to performance. Also an interaction effect of organizational culture and entrepreneurship on performance is found. These results have both theoretical and practical implications. In accordance with the resource-based view, sustained superior performance can be attributed to unique capabilities, such as human resource management (HRM) and entrepreneurship. From a practical perspective, these findings indicate that HPWSs are applicable in Korean settings.
Vol.17/1 (2011, June)
Mutual Fund Tournaments and Structural Changes in an Emerging Fund Market: The Case of Korea
Author Kwangsoo Ko and Yeonjeong Ha
Keywords Segment Tournaments, Family Tournaments, Korean Fund Market, Structural Changes, Conflicts of Interests
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The objective of this study is to evaluate the mutual fund tournament, i.e., an agency issue between fund managers and investors, in the presence of structural changes in an emerging fund market. This study extends BHS (1996), Busse (2001), and Kempf and Ruenzi (2008b). A switching regression model is employed to investigate the effects of structural changes on the mutual fund tournament. We find that structural changes in the Korean fund market alter the tournament type from a segment to a family tournament. We believe that the family tournament comes from more competition since 2005 within large families. Our evidence of tournaments is robust to return frequency. Our results indicate that regulators and fund families should exercise greater caution than is currently the case to prevent conflicts of interests between fund investors and managers.
Vol.17/1 (2011, June)
Understanding Green Purchase: The Influence of Collectivism, Personal Values and Environmental Attitudes, and the Moderating Effect of Perceived Consumer Effectiveness
Author Yeonshin Kim
Keywords Collectivism, Personal Values, Environmental Attitudes, Perceived Consumer Effectiveness, Green Purchase Behavior
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This study investigates determinants of green buying behavior. Using structural equation modeling, the effects of collectivism, values and attitudes on ecological purchase and their hierarchical relationships are investigated. Furthermore, a moderated multiple regression is applied to test whether the link between attitude and behavior is enhanced by the degree of perceived consumer effectiveness (PCE). The results suggest that collectivism is important in predicting green purchase. The positive influence of collectivism on consumer greenness flows through selftranscendence values. However, PCE fails to moderate the strength of the relationship between environmental attitudes and green purchase behavior. Implications for public policy and marketing communication efforts are discussed.
Vol.17/1 (2011, June)
Institutional Investment Horizons and CEO Compensation
Author Jae Yong Shin
Keywords Ownership; Institutional investors; Investment horizons; CEO compensation
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I investigate the relation between the structure of CEO compensation and the investment horizons of a firm’s institutional investors and find results consistent with the assertion that short-sighted institutions’ focus on shortterm earnings leads firms to grant more options with higher sensitivity to stock price. In contrast, the percentage holdings of long-term investors are negatively correlated with the use of options and the sensitivity of total CEO equity incentives to changes in stock price. Further results suggest that firms with higher short-term institutional ownership are more concerned about a negative earnings surprise and that when determining annual bonuses, they punish their CEOs more severely. In total, the analyses provide evidence that the investment horizon of institutional investors is associated with firms’ CEO compensation policies.
Vol.17/1 (2011, June)
Empirical Investigation on the Determinants of Retail Prices
Author Inseong Song
Keywords Retail Prices, Wholesale Prices, Retail Competition, Promotion
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This study utilizes a rich data set from multiple retail chains to investigate the determinants of retail prices identified from marketing literature: wholesale price, retail competition, time elapsed since last promotion. The empirical results indicate that although all three factors are statistically significant in explaining the observed retail prices, they differ in the extent to which they explain retail price variation. The competing retail prices appear to explain more of variations in retail prices than other factors do. It is also found that a substantial variation in the pass-through of a brand exists across retailers. I also find positive cross-retail price responses, i.e., price reductions in competing retailers tend to lower the prices in a retailer. Regarding the impact of time since last promotion, the result supports the concavity of the effect of the variable. In terms of the direction, the overall effect of TLP is positive initially and then decays.
Vol.17/1 (2011, June)
Can We Establish Consumer Cultural Positioning Through Print Advertising in the Developing Markets? A Content Analysis of Advertising in Chinese Women’s Magazines
Author Dong-xin Li, Dong Il Lee, Yong-Ki Lee, and Mitch Griffin
Keywords Consumer Cultural Positioning (CCP), Brand Name, Product Appearance, Advertising Appeal
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This paper conducts a content analysis of a total of 480 advertisements from three popular Chinese women’s magazines—Rayli, Fashion Cosmo, and Bazaar—to assess the Consumer Cultural Positioning (CCP) of the ads. The results show that Global CCP is more commonly utilized for brand positioning strategies than Foreign CCP or Local CCP. Five elements of the advertisements—the language used for brand name, the pronunciation of brand name, the intended meaning rooted in original foreign country for brand name, the product’s appearance of either utilitarian or symbolic, and a modern or westernized advertising appeal for brand positioning—are found to be indeed differentially related to GCCP and FCCP compared to LCCP.
Seoul Journal of Business
ISSN 1226-9816 (Print)
ISSN 2713-6213 (Online)